General Motors Company (NYSE:GM) is expanding their online shopping tool that allows customers to avoid showrooms when buying new cars. The software keeps GM’s 4,300 central to the vehicle sales. As Amazon continues to grow, many consumers are becoming accustomed to making purchases online rather than dealing with the pressures of salespeople.
According to The Wall Street Journal, General Motors is planning to extend their web-based application called Shop-Click-Drive to their entire dealer network. This app would let new car buyers use their computer screen to lock in the price of a new car. They can also use the software to find out the trade-in value of their old car, receive financing, set up test drives, or even set up the delivery of their new vehicles.
Car dealers prefer to make sales face-to-face because it enables them to sell add-ons, insurance products, and other profitable services.
Tesla Motors was the pioneers of selling luxury vehicles through their website. Tesla never had franchised dealers.
General Motors Company (NYSE:GM) dealers can opt out of this project and some dealers already have. One of the reasons why some dealers resisted the online model is because they were pressured to put investments into the makeovers of their stores. Around 100 dealers have signed up for a pilot, which is expected to launch this January in Michigan, Minnesota, Arizona, and Wisconsin.
General Motors Company (NYSE:GM) said that this program is not intended to replace dealers and showrooms. They want to give dealers a new way to reach a group of customers that prefer online transactions. Many of these potential customers are young and tech-savvy. So far 900 cars have been sold through Shop-Click-Drive, but only five has been delivered directly to customers. The majority of the buyers prefer to pick up their vehicles at a showroom.